Popular Ice Cream Chain Announces 500 Store Closures Due to Bankruptcy

When a familiar brand disappears from store shelves, it often signals bigger changes behind the scenes. That’s exactly what’s happening now with Thrifty Ice Cream, a name many ice cream lovers have known for decades.

After more than 80 years in the market, the beloved ice cream brand is facing a major shakeup—all of its ice cream counters inside Rite Aid stores across the U.S. are closing. Thrifty Ice Cream is found at about 500 counters inside Rite Aid pharmacies nationwide.

However, with Rite Aid’s recent financial struggles hitting a new low, those counters will be shutting down. This comes as Rite Aid, one of the country’s largest pharmacy chains, has recently filed for Chapter 11 bankruptcy for the second time in less than a year.

The good news? Even though the counters are going away, Thrifty Ice Cream won’t vanish completely. The brand’s tubs will still be available at thousands of grocery stores and other retailers across the country. So, while you won’t be able to grab a scoop inside Rite Aid anymore, you can still find your favorite flavors in the freezer aisle.

Thrifty Ice Cream’s history dates back to 1940, when it first launched in Los Angeles. Rite Aid acquired the brand in 1996, adding it to their in-store offerings. For years, customers have associated the creamy treat with Rite Aid visits.

However, the pharmacy chain has been closing many of its stores over the past two years, including locations in California, New York, New Jersey, Pennsylvania, and other states. The ice cream counters were often one of the perks inside these stores.

Popular Ice Cream Chain Set to Close 500 Stores Amid Bankruptcy

The recent bankruptcy filing reveals just how tough things have become for Rite Aid. CEO Matt Schroeder acknowledged the company’s financial struggles in a statement earlier this month.

“While we have continued to face financial challenges, intensified by the rapidly evolving retail and healthcare landscapes in which we operate, we are encouraged by meaningful interest from a number of potential national and regional strategic acquirers,” he said.

Schroeder also emphasized that despite the bankruptcy, the company’s priority is to keep pharmacy services running smoothly and to save as many jobs as possible. Still, the numbers behind the scenes are staggering. Rite Aid’s liabilities range anywhere from $1 billion to $10 billion, according to court filings.

To keep things moving during this process, Rite Aid has secured nearly $2 billion in new financing from its existing partners. This will help them stay afloat while they restructure. Back in April, rumors surfaced that Rite Aid was running low on cash and exploring a possible sale to manage its debt.

Part of the plan to reduce debt includes shutting down hundreds of stores, in addition to the closures already made, and auctioning off assets like its intellectual property. This includes the Thrifty Ice Cream brand and its factory located in El Monte, California.

If someone buys Thrifty Ice Cream, there’s a chance the brand could continue to thrive in grocery stores across the country, just without the Rite Aid connection.

Understanding Brand Resilience

According to Clayton Christensen, a renowned business professor, the downfall of established brands often stems from their inability to adapt to changing consumer preferences. He emphasizes the importance of innovation and the need for businesses to continuously evolve.

Christensen's research indicates that brands can regain traction by actively engaging with consumers through market research and adapting their product offerings. For Thrifty Ice Cream, exploring new flavors, healthier options, or sustainable practices could have potentially salvaged their market presence.

The Ice Cream Chain’s Future Depends on Rite Aid

Rite Aid’s bankruptcy troubles didn’t start overnight. They first filed for bankruptcy protection back in October 2023, after losing $750 million the previous year.

That move helped them cut $2 billion in debt, close hundreds of stores, and sell off parts of the business, including their pharma benefit company. They also negotiated settlements related to opioid lawsuits.

But even after those efforts, the company still faced a heavy debt load of about $2.5 billion and was essentially controlled by its lenders. Rite Aid is still fighting to find solid ground in a challenging retail environment that’s changing rapidly.

Between rising competition from online pharmacies, changes in healthcare regulations, and shifting consumer habits, the road ahead won’t be easy.

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For Thrifty Ice Cream fans, the news is bittersweet. While it’s disappointing to lose the convenience of grabbing a scoop during a pharmacy visit, the brand itself isn’t disappearing just yet.

If a buyer steps in, you can still expect to find tubs of Thrifty Ice Cream at your local grocery store. Until then, the future of this classic brand remains uncertain, wrapped up in the larger story of Rite Aid’s struggle to stay afloat in today’s tough retail climate.

Dr. Sonja Lyubomirsky, happiness researcher, suggests that brands need to foster emotional connections with their customers to build loyalty. In her studies, she highlights that companies that prioritize customer engagement and community-building often enjoy greater resilience in challenging times.

For Thrifty Ice Cream, a robust social media strategy that emphasizes customer stories and feedback could have helped maintain their presence. By focusing on creating a community of passionate ice cream lovers, they might have mitigated the impact of the store closures.

Moving Forward: Actionable Steps

The closure of Thrifty Ice Cream counters indeed serves as a cautionary tale about brand sustainability in the competitive food sector. Experts like Michelle Singletary emphasize the importance of financial health and strategic planning in maintaining business viability.

In retrospect, diversifying product lines and engaging more actively with consumers could have alleviated some of the financial pressures. By learning from this experience, other brands can develop proactive strategies to adapt to consumer trends, ensuring longevity in a fast-paced market.